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Why Deutsche Matters

Think a bank crisis in Europe doesn’t affect you? Think again.

Remember Lehman Brothers? That mess kicked off a GLOBAL recession eight years ago. The collapse of another global bank – one as big and pervasive as Deutsche – could send world economies even lower.

While Deutsche Bank is struggling to stay afloat, the U.S. Department of Justice is trying to collect a $14 billion fine as reprimand for the banks use of mortgage-backed securities.

Mortgage-backed securities were investment products that banks made up to hold low-quality debt. They rated artificially high by for-profit ratings agencies and then packaged and sold… and re-packed and resold… until the investors left holding them held absolutely nothing of value.

Well, mortgage-backed securities played a large part in the collapse of Lehman Brothers and Bear Stearns.

And it turns out they didn’t die with those behemoths. International banks like Deutsche Bank, Credit Suisse and Barclays have had their hand in this cookie jar for years. Even our very own Bank of America is in on the game.